Fidelity & Deposit Co. v. Poe

Pattison, J., delivered the opinion of the Court. The suit in this ease was brought by the receivers of the United Surety Company against the Fidelity and Deposit Company, the appellant, to> recover the sum of $5,183.34 in the hands of the appellant belongings to the appellees, and .about which there is no dispute, but to the recovery of which the. appellant interposed two pleas of setoff, one, for the sum of $3,666.01 and the other for the sum of $1,417.98. The first of these amounts ($3,666.01) was allowed as a credit in a suit brought by tbe appellees against the appellant, which resulted in a verdict for the appellees. On appeal that judgment was reviewed and affirmed by this Court (ante, p>. 479), and as the credit is composed of the same ⁵⁰⁴ items as the one there allowed, it, of course, will not again he allowed in this case.

The first set-off claim is thus eliminated from all further consideration, leaving only the second claim to be considered by m • In tbe trial of the case below, both -set-off claims were excluded by the court, sitting as a jury, and a verdict was rendered by it for the plaintiffs for the- sum -claimed by them with interest, and upon such verdict a judgment was thereafter entered. Tbe set-off claim of $1,417.98 is founded upon the following facts. On the 24th day of April, 1909, -the American Bonding Company issued to the Dixie Fire Insurance Company, obligiee, a fidelity bond in the penalty of $10,000, on behalf of L. S. McEnany, as general agent for the Dixie Eire Insurance Company. -On the 2nd day -of August, 1909, the United ¡Surety Company and the American Bonding Company entered into- an agreement of reinsurance covering this list, the United Surety Company thereby agreeing to pay to the American Bonding Company o-ne-third of any sum or sum-s which that -company should become liable for under said bond. Some time before the 6th day of December, '1912, -a claim was made-on the American Bonding Company by the Dixie Eire Insurance Company under the McEnany bond, and on -or about that- -date the American Bonding Company filed in the case of Bowles et al. v. United Surety Company et al., in the Circuit Court -o-f Baltimore City, a petition -setting forth the execution of the McEnany bond by it, the reinsurance of the United Surety Company and the fact that claim had been made upon that bond; and praying that the receivers -of the United -Surety Company be ordered' to retain in their bands a -sum to p-ay their share o-f any loss.

With its said petition the American Bonding -Company filed a contingent -claim for loss on the McEnany bond. On the 27th day of June, 1913, -the American Bonding Company entered into a reinsurance agreement with the Fidelity and Deposit Company, by which the Fidelity and ⁵⁰⁵ Deposit Company agreed to reinsure with the American Bonding Company the risk already assumed and those to he assumed hy it in the execution of indemnity .agreements, undertakings, etc., and in this agreement are found the following provisions: “The Fidelity does hereby agree to pay the American the full amount of the ultimate loss which the American shall pay after the close of business on tbe 31st day of May, 1913, under or by virtue of eacb of sueb indemnity agreements, undertakings, recognizances, bonds and obligations of suretyship generally burglary, robbery, and theft policies, and reinsurance agreements, as well as on account of costs, expenses, and attorneys’ fees incurred by the American in investigating, settling or resisting any claim made thereunder, in defending or prosecuting any action, suit or other proceedings in connection therewith, or in obtaining, or attempting to obtain, a release thereunder. “The term ‘ultimate loss,’ as herein used, shall he the net loss sustained by tbe American on any instrument hereby reinsured after realizing upon all indemnity agreements, .reinsurance agreements, applications, collateral security of all kinds, rights of contribution from co-sureties, privileges, recourses and benefits which tbe American may hold, or to which it may he entitled, in connection with such instrument.” Though suit wa® brought hy the Dixie Fire Insurance Company against the American Bonding Company upon its claim under the McEnany bond, it Wasi finally adjusted hy them with the approval of the United .Surety Company, and on the 14th day of November, 1913, the American Bonding' Company paid to the Dixie Eire Insurance Company the sum of $5,826.80, the .amount of loss agreed upon. And on November 19th, 1913, it rendered a statement to' the Fidelity and Deposit Company of losses paid during the week ending November 15th, 1913, which included the sum so paid hy it to the Dixie Eire Insurance Company on the McEnany bond, and on November 25th, 1913, the Fidelity and Deposit Company paid the amount of said statement to "the American' ⁵⁰⁶ Bonding'Company. Thereafter, on Dteoember 7th, 1913, the American Bonding Company filed in said case of Bowles v. United Surety Company its liquidated claim for said loss and -as a result thereof the auditor allowed the American Bonding Ctempany its claim against the United Shrety Company of $1,722.47, being one-third of the entire loss, or the